E-commerce has always been a growing force in the economy, but the COVID-19 pandemic saw exponential growth for online businesses. While certain traditional retail spaces have been closing their doors, making it more difficult for investors to generate income through brick-and-mortar stores, the shift has opened up lucrative opportunities in other submarkets.
The Real Estate Market Requires Agility
If 2020 has taught us anything, it’s that the commercial real estate market is fluid. Large shifts can happen overnight, and when one submarket goes down, another comes up. Such is the case with e-commerce. As businesses shifted to the digital space, traditional stores and retail properties experienced contraction. On the other end of the equation, the need for industrial properties for manufacturing and storage shot up dramatically. Property investors needed to think outside of the box and adapt to changes very quickly, but the long-term projects for industrial properties is one of the main factors strengthening the commercial real estate market going forward in 2021, and possibly well into 2022.
We have already covered the specifics of why industrial properties make for good investments [link to previous blog post goes here]. The demand for physical retail space may wax and wane in the future, but industrial properties are always in-demand. The main reason is that industrial properties can be repurposed easily. What is currently being used as a warehouse to store inventory can be converted to space for manufacturing, research and development, and more in the future. The best part of the versatility of industrial space for property investors is that tenants take care of any specific build-outs that are necessary.
Investing Now and for the Future
E-commerce is not going anywhere but up. More people are making purchases from laptops and mobile devices instead of going out to stores, even after COVID vaccines were announced. As the market collectively tries to figure out how to adapt and reuse traditional retail space, industrial properties are turning into more lucrative investments moving forward.
To learn more about financing options for industrial properties, contact the team at The Capital Rams today.